How to Get Washington out of Health Care

The experience of the last fifty years proves that the United States government cannot solve the problem of how to provide high-quality healthcare to all its citizens at a price the country can afford -- at least not without rationing, lowering the quality of care, and destroying the medical profession as a profession. Only the ingenuity of the private sector can create the healthcare system the public desires, but this can't happen until the federal government's iron grip on healthcare is broken.Until passage of the Patient Protection and Affordable Care Act (PPACA, aka ObamaCare), the rationale for almost five decades of federal intervention in the health care marketplace was largely cost-containment. To that goal, ObamaCare added rationing via the Independent Payment Advisory Board (IPAB), the elimination of the private insurance market, the redistribution of wealth via health insurance subsidies, and the reorganization of healthcare delivery into entities easily controlled from Washington called Accountable Care Organizations (ACO). The regulatory regime for the complete socialization of healthcare is now in place and in process.

Three things must happen if the American people are to take back their healthcare system in order to optimize cost and quality through private-sector reforms. First and most importantly, the financial impetus for federal intervention must be minimized or eliminated by limiting federal liability for healthcare costs. The Ryan plan can do this, and something akin to it should be adopted as soon as possible. Second, ObamaCare must be repealed to prevent destruction of the private healthcare market before it can be properly reformed. Third, Congress must stop the degradation of the quality of care by prohibiting the federal government from regulating medical decision-making.

This last point is critical but nearly absent from public discussion. Neither approval of a Ryan-type plan nor the repeal of ObamaCare, though both are widely recognized as essential and require no further comment here, will do enough to eliminate the massive regulatory regime already in existence and under which we will soon have socialized medicine in all but name. To do that, Congress must go beyond cost and halt the ongoing centralization of regulatory control over healthcare quality, something most readily done by halting Washington's ongoing annexation of the power of the individual states to regulate the practice of medicine.

Until 2006, responsibility for the quality of healthcare was the sine qua non, as well as the ethical duty of the medical profession. That year, Washington began the process of taking this traditional charge away from physicians when functionaries at the Centers for Medicare and Medicaid Services (CMS) conceived the ostensibly sensible idea of Value Based Purchasing (VPB). According to the CMS website, VBP was created:

... to develop the tools necessary to create rational approaches to lessen healthcare cost growth and to identify and encourage care delivery patterns that are not only high quality, but also cost-efficient[.] ... To help address these concerns, CMS ... has begun to transform itself from a passive payer of services into an active purchaser of higher quality, affordable care[.] ... This is the underlying principle of value-based purchasing (VBP). The cornerstones of VBP are the development of a broad array of consensus-based clinical measures, effective resource utilization measurement and the payment system redesign mentioned above." [Emphases mine.]

Instead of simply paying the bills, CMS would now demand higher quality, lower cost, and fewer mistakes in care -- commendable, perhaps, but only at a steep cost. In order to make this happen, the agency started creating programs to both define standards for quality care and directly oversee the provision of that care. Among the "cornerstones" already created are Quality Measures, Comparative Effectiveness Research, the Patient-Centered Outcomes Research Institute, the IPAB, ACOs, the mandated computerization of all healthcare data, and of course CMS's new Innovation Center. In doing this, CMS has arrogated to itself ultimate responsibility for not just the cost, but also the quality of your future health care.

It is hard to overstate the importance of this change -- a change so grand that the agency would now consider itself the ultimate authority in all matters pertaining to healthcare, yet so radical that it goes against the thinking of even those who created the model for government healthcare programs, Medicare. Section 1801 of Title XVIII, the very first words of the original Medicare law, states:

Nothing in this title shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided[.]" [Emphasis mine.]

This prominently placed injunction was clearly meant to assuage the fears of doctors and a public worried about government interference in their care. Along with similar ones at the state level, its purpose was to preserve healthcare quality by protecting patient-centered medical decision-making from those, including government bureaucrats, who might put financial or political considerations ahead of patient welfare. Yet the central planners at CMS want the power to control medical practice for exactly this purpose: the ability to force doctors to abide by government-approved limits on the availability and cost of your care, limits that will vary depending upon how important the government thinks you are.

Supporters of central control believe that federal efforts to improve care will generate useful information. This may be true, but the actual effect on quality will depend more on how that information is used than where it originates. If doctors and patients remain free to both define quality and decide how best to integrate this knowledge into clinical practice, the public benefit could indeed be substantial. If, however, CMS instead decides to use the information to set its own standards for quality care and then compel doctors to obey them, the loss to the public would be just as great. Unfortunately, all indications are that CMS has chosen the latter scenario. In fact, direct CMS interference in medical practice is escalating rapidly and will soon lead to the de facto regulation of physicians and medical practice by that agency.

CMS has for many years had a loosely defined set of minimum standards that hospitals must meet in order to care for Medicare patients. In recent years these Medicare Hospital Conditions of Participation have grown into a vast, costly, centrally controlled regime of micromanagement covering every aspect of hospital care. Inevitably, many of these regulations governing hospitals will affect the physicians working within them. Federal inspectors are now actually going into operating rooms to ensure that physicians, many with decades of experience managing complex diseases, are labeling medication syringes two seconds after filling them rather than two seconds before. When doctors complain about such unwarranted interference, they are told that they must strictly obey CMS rules or risk hospital closure from loss of access to Medicare money. If they persist, they can be sanctioned and forced off the hospital medical staff, a once-independent body now too often a mere tool to implement federal rules. This is not unlike teachers being told that they must give passing grades to students who've never attended class in order to meet federal requirements, keep their schools open, and retain their jobs.

By herding physicians into easily managed groups, the highly touted ACOs will allow CMS to extend this indirect control to nearly all physicians, in hospital and out. This in turn will give CMS the practical means to regulate medical practice, pushing state agencies aside in the process and subjecting physicians to a regime of what von Mises calls "bureaucratic management." So regulated, physician incentives would change so that following the "rules" would replace your health as your doctor's primary concern. President Obama will keep his promise that no bureaucrat will come between you and your doctor, but since your doctor will now be the bureaucrat, his promise will amount to nothing.

For well over a century, the quality of healthcare improved steadily under physician leadership. State regulators encouraged quality by allowing physicians the flexibility to individualize care to each patient. By forcing top-down change through strict adherence to CMS standards and procedures, federal regulation of medical practice will have just the opposite effect. In making compliance more important than critical thinking, innovation will suffer and the quality of medical care will actually decline. With the obvious exception of funding for medical education and research, there is little evidence that federal involvement on the quality side of healthcare is even helpful, let alone necessary. In the end, Washington's move to regulate doctors will result in nothing but another entrenched bureaucracy enforcing mediocrity on a profession that can do better, and a people who deserve better.

Federal responsibility for the cost of care must be minimized to save us from bankruptcy, and ObamaCare must be repealed in order to save the private healthcare infrastructure. The best way to preserve the quality of healthcare is to insure that doctors, not bureaucrats, continue to be the arbiters of quality, and that your doctor continues to work for you and not the government. Given the manifest inability of the Congress to effectively purge every troublesome item in the thousands of pages of existing regulations that now give Washington the power to decide your future care, perhaps the only practical solution is the simplest one: make it illegal for the federal government to regulate the practice of medicine. This might be as straightforward as having the Congress mandate that HHS enforce already existing law in Section 1801 as noted above. This would protect both the quality of medical care and the freedom of doctors to put the welfare of their patients first. It would be a boon even to those who believe that the federal government has a role in improving quality, since once an effective prohibition is in place, Washington can continue to support improvements in quality without the threat of bureaucratic interference in the doctor-patient relationship. Finally, it would also reverse the transfer of yet another important regulatory power from the states to Washington, rejuvenate the moribund medical profession, and set an example for future regulatory reform.

The experience of the last fifty years proves that the United States government cannot solve the problem of how to provide high-quality healthcare to all its citizens at a price the country can afford -- at least not without rationing, lowering the quality of care, and destroying the medical profession as a profession. Only the ingenuity of the private sector can create the healthcare system the public desires, but this can't happen until the federal government's iron grip on healthcare is broken.

Until passage of the Patient Protection and Affordable Care Act (PPACA, aka ObamaCare), the rationale for almost five decades of federal intervention in the health care marketplace was largely cost-containment. To that goal, ObamaCare added rationing via the Independent Payment Advisory Board (IPAB), the elimination of the private insurance market, the redistribution of wealth via health insurance subsidies, and the reorganization of healthcare delivery into entities easily controlled from Washington called Accountable Care Organizations (ACO). The regulatory regime for the complete socialization of healthcare is now in place and in process.

Three things must happen if the American people are to take back their healthcare system in order to optimize cost and quality through private-sector reforms. First and most importantly, the financial impetus for federal intervention must be minimized or eliminated by limiting federal liability for healthcare costs. The Ryan plan can do this, and something akin to it should be adopted as soon as possible. Second, ObamaCare must be repealed to prevent destruction of the private healthcare market before it can be properly reformed. Third, Congress must stop the degradation of the quality of care by prohibiting the federal government from regulating medical decision-making.

This last point is critical but nearly absent from public discussion. Neither approval of a Ryan-type plan nor the repeal of ObamaCare, though both are widely recognized as essential and require no further comment here, will do enough to eliminate the massive regulatory regime already in existence and under which we will soon have socialized medicine in all but name. To do that, Congress must go beyond cost and halt the ongoing centralization of regulatory control over healthcare quality, something most readily done by halting Washington's ongoing annexation of the power of the individual states to regulate the practice of medicine.

Until 2006, responsibility for the quality of healthcare was the sine qua non, as well as the ethical duty of the medical profession. That year, Washington began the process of taking this traditional charge away from physicians when functionaries at the Centers for Medicare and Medicaid Services (CMS) conceived the ostensibly sensible idea of Value Based Purchasing (VPB). According to the CMS website, VBP was created:

... to develop the tools necessary to create rational approaches to lessen healthcare cost growth and to identify and encourage care delivery patterns that are not only high quality, but also cost-efficient[.] ... To help address these concerns, CMS ... has begun to transform itself from a passive payer of services into an active purchaser of higher quality, affordable care[.] ... This is the underlying principle of value-based purchasing (VBP). The cornerstones of VBP are the development of a broad array of consensus-based clinical measures, effective resource utilization measurement and the payment system redesign mentioned above." [Emphases mine.]

Instead of simply paying the bills, CMS would now demand higher quality, lower cost, and fewer mistakes in care -- commendable, perhaps, but only at a steep cost. In order to make this happen, the agency started creating programs to both define standards for quality care and directly oversee the provision of that care. Among the "cornerstones" already created are Quality Measures, Comparative Effectiveness Research, the Patient-Centered Outcomes Research Institute, the IPAB, ACOs, the mandated computerization of all healthcare data, and of course CMS's new Innovation Center. In doing this, CMS has arrogated to itself ultimate responsibility for not just the cost, but also the quality of your future health care.

It is hard to overstate the importance of this change -- a change so grand that the agency would now consider itself the ultimate authority in all matters pertaining to healthcare, yet so radical that it goes against the thinking of even those who created the model for government healthcare programs, Medicare. Section 1801 of Title XVIII, the very first words of the original Medicare law, states:

Nothing in this title shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided[.]" [Emphasis mine.]

This prominently placed injunction was clearly meant to assuage the fears of doctors and a public worried about government interference in their care. Along with similar ones at the state level, its purpose was to preserve healthcare quality by protecting patient-centered medical decision-making from those, including government bureaucrats, who might put financial or political considerations ahead of patient welfare. Yet the central planners at CMS want the power to control medical practice for exactly this purpose: the ability to force doctors to abide by government-approved limits on the availability and cost of your care, limits that will vary depending upon how important the government thinks you are.

Supporters of central control believe that federal efforts to improve care will generate useful information. This may be true, but the actual effect on quality will depend more on how that information is used than where it originates. If doctors and patients remain free to both define quality and decide how best to integrate this knowledge into clinical practice, the public benefit could indeed be substantial. If, however, CMS instead decides to use the information to set its own standards for quality care and then compel doctors to obey them, the loss to the public would be just as great. Unfortunately, all indications are that CMS has chosen the latter scenario. In fact, direct CMS interference in medical practice is escalating rapidly and will soon lead to the de facto regulation of physicians and medical practice by that agency.

CMS has for many years had a loosely defined set of minimum standards that hospitals must meet in order to care for Medicare patients. In recent years these Medicare Hospital Conditions of Participation have grown into a vast, costly, centrally controlled regime of micromanagement covering every aspect of hospital care. Inevitably, many of these regulations governing hospitals will affect the physicians working within them. Federal inspectors are now actually going into operating rooms to ensure that physicians, many with decades of experience managing complex diseases, are labeling medication syringes two seconds after filling them rather than two seconds before. When doctors complain about such unwarranted interference, they are told that they must strictly obey CMS rules or risk hospital closure from loss of access to Medicare money. If they persist, they can be sanctioned and forced off the hospital medical staff, a once-independent body now too often a mere tool to implement federal rules. This is not unlike teachers being told that they must give passing grades to students who've never attended class in order to meet federal requirements, keep their schools open, and retain their jobs.

By herding physicians into easily managed groups, the highly touted ACOs will allow CMS to extend this indirect control to nearly all physicians, in hospital and out. This in turn will give CMS the practical means to regulate medical practice, pushing state agencies aside in the process and subjecting physicians to a regime of what von Mises calls "bureaucratic management." So regulated, physician incentives would change so that following the "rules" would replace your health as your doctor's primary concern. President Obama will keep his promise that no bureaucrat will come between you and your doctor, but since your doctor will now be the bureaucrat, his promise will amount to nothing.

For well over a century, the quality of healthcare improved steadily under physician leadership. State regulators encouraged quality by allowing physicians the flexibility to individualize care to each patient. By forcing top-down change through strict adherence to CMS standards and procedures, federal regulation of medical practice will have just the opposite effect. In making compliance more important than critical thinking, innovation will suffer and the quality of medical care will actually decline. With the obvious exception of funding for medical education and research, there is little evidence that federal involvement on the quality side of healthcare is even helpful, let alone necessary. In the end, Washington's move to regulate doctors will result in nothing but another entrenched bureaucracy enforcing mediocrity on a profession that can do better, and a people who deserve better.

Federal responsibility for the cost of care must be minimized to save us from bankruptcy, and ObamaCare must be repealed in order to save the private healthcare infrastructure. The best way to preserve the quality of healthcare is to insure that doctors, not bureaucrats, continue to be the arbiters of quality, and that your doctor continues to work for you and not the government. Given the manifest inability of the Congress to effectively purge every troublesome item in the thousands of pages of existing regulations that now give Washington the power to decide your future care, perhaps the only practical solution is the simplest one: make it illegal for the federal government to regulate the practice of medicine. This might be as straightforward as having the Congress mandate that HHS enforce already existing law in Section 1801 as noted above. This would protect both the quality of medical care and the freedom of doctors to put the welfare of their patients first. It would be a boon even to those who believe that the federal government has a role in improving quality, since once an effective prohibition is in place, Washington can continue to support improvements in quality without the threat of bureaucratic interference in the doctor-patient relationship. Finally, it would also reverse the transfer of yet another important regulatory power from the states to Washington, rejuvenate the moribund medical profession, and set an example for future regulatory reform.